CN to build new terminal for Bakken crude oil producers

CN and Tundra Energy Marketing Ltd., which handles crude oil on behalf of producers in the Williston Basin, including parent company Tundra Oil & Gas Partnership, have signed a memorandum of understanding to construct a crude oil railroad tank car loading terminal near Cromer, Man., to meet the needs of Bakken crude oil producers in Manitoba and Saskatchewan.

The terminal will initially load 30,000 barrels of crude oil per day into tank cars (about 50 cars worth) starting in the second quarter of 2013. The facility will have the potential to accommodate a unit train of 100 tank cars, with each train carrying approximately 60,000 barrels per day of crude oil.

“This project, combined with 410,000 barrels of oil storage currently under construction at our terminal in Cromer—a six-fold increase in existing capacity—will provide us with access to alternative North American markets for Williston Basin crude oil over CN’s network at a time when there is inadequate pipeline takeaway capacity,” said Tundra Energy Marketing President Bryan Lankester. “Our Cromer location at the most easterly point of crude oil production in Canada should provide a market advantage to our crude oil producers and shippers.”

“We are pleased to be a key supply chain enabler for Tundra Energy Marketing,” said CN Executive Vice President and Chief Marketing Officer Jean-Jacques Ruest. “CN will help Tundra’s customers reach markets with good net-backs for their crude. And further growth will be part of the story. The Cromer transload terminal is expandable, with the potential to handle complete crude oil unit trains of more than 100 cars, which will generate greater efficiencies and market reach for Canadian crude oil. Working closely with companies such as Tundra Energy Marketing is making the transportation of crude oil one of CN’s fastest growing businesses. We expect to move more than 30,000 carloads of crude oil in 2012, and we believe we have the scope to double this crude oil business next year.”